US Spends $95 Billion on Medical Research, Unwisely

Today’s Journal of the American Medical Association is a special issue covering the state of US medical research. Part of the edition is a report co-authored Dr. Hamilton Moses III, chairman of the Alerion Institute, which is dedicated to studying research policy. The report says that the US spends more than any other nation on earth for medical research, and that it may not be getting bang for its $95 billion bucks a year.

Dr. Moses said, “If we’re soon going to be spending $100 billion a year, we’d better have treatments that work over a long period of time against diseases that are important today and will be more important tomorrow. If we don’t know those conditions are satisfied, we can’t judge whether we’re getting our money’s worth.”

The statistics are rather disconcerting. Six cents out of every healthcare dollar goes on medical research, which is rather healthy (the pun is deliberate). But the country spends only one-tenth of one cent on evaluating drugs for their long-term efficacy and for determining what compounds work most efficiently at the lowest cost. In other words, the research isn’t more than trickling from the labs to the patients’ beds.

The funding formula is partially responsible. Industry funds 57% of research and the National Institutes of Health pick up 28%, with non-profits and other entities covering the remaining 15%. These ratios haven’t changed in ten years, according to Dr. Moses. Industry has a vested interest and a legal responsibility to maximize profits. And in America, that has been taken to mean maximize them this quarter. The payoff is in short-term effects of existing drugs. Long-term studies of discovery-stage substances don’t make it into a marketing plan.

What is to be done? Industry won’t change without huge restructuring of its incentive schedule, and the law of unintended consequences makes one hesitate to suggest anything along those lines. However, the NIH’s share of the $95 billion works out to be around $26.6 billion. A substantial increase would allow for more research into conditions for which there isn’t much effective treatment (e.g.,Alzheimer’s) and for developing basic research results into commercially and medically effective treatment. And if one doesn’t like the idea of more federal spending, increased charitable giving can achieve the same effect (if less substantially) through non-profits. Simply put, America may be spending enough but not spending the money well enough.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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